3 tips for Canadian companies selling in China

A Happy New Year and a happy new customer. As people around the world celebrate the Chinese New Year, it’s worth contemplating that with globalization, the world is becoming both smaller and larger, and we must adapt our approach to meet the needs of the modern international customer.

China is still growing and expanding at a rapid rate. This change represents a great opportunity for Canadian firms looking to grow internationally. However, companies doing business in China is not business as usual and one size (or strategy) does not fit all. A basic business tenet is to ‘know your customer’,’ but what do our global customers really want and need? To succeed in China, it requires time, focus and the willingness to embrace a different way of conducting business.

3 tips for Canadian companies selling to the China market:

1. Customer relationships are personal and paramount

Developing relationships is a central aspect of conducting business in China. In the West, there is a tendency to see business as separate from personal relationships. But in China, there is an expectation that the two are intertwined.

The Chinese take customer relationships seriously. Unlike the transactional approach we’ve become used to in North America, companies in China not only devote time to customers, they treat them like extended family members.

It’s more than just offering 24/7 service. Chinese companies take a highly personal approach to client relations – inviting customers to events, facility tours, family cottages and holiday parties. They also seek to facilitate customers’ purchasing power. Are you willing to partner with your customer, educate them on your product and take on a share of risk to induce them to choose your product or solution?

2. Coopetition: building long-term partnerships

Doing business in China requires understanding the definition of a true partnership: It must be mutually beneficial and you must be prepared to lay your cards on the table.

Any company looking to compete in China needs to view partnership and expansion as a long-term game, one that will require a commitment of financial and human resources. As quickly as Chinese firms seem to get products to market, they can be slow to form alliances with international firms. The importance of having people on the ground in China cannot be understated.

Customers also have various preferences in terms of how they purchase products. Some are okay with direct selling in china. Others prefer to buy through local distribution channels. Sometimes you have no choice but to sell through a distribution channel or partner with a local company, or even a competitor, to get your product or solution to market. Your role is to engage these partners in an open and honest way. They want face time, attention and nurturing. It’s your job to educate your partner and take the time required to build trust.

3. Cautious and prudent: slow and steady wins the China ‘race’

The regulatory environment in China can be tedious for foreign companies. Licensing and distribution will be long processes, and wading through the bureaucracy is not for anyone in a rush. The Chinese government favours the promotion of its own domestic firms for obvious reasons.

One thing Chinese companies are particularly good at is integrating politics and politicians into their business practices. In emerging markets, governments are often involved in commerce at the socioeconomic level. Take the time to navigate these relationship and form public-private partnerships to show where your solution can help them meet these socioeconomic goals.

As frustrating as it can seem, product superiority doesn’t always win in China. Taking new products to market in China requires an approach that is accommodating. Too often, businesses go in with the product or service predefined. They’ve experienced success elsewhere and they anticipate they can quickly replicate that past success in China. Here you must be prudent and willing to adapt your solution to meet the needs of the local market.

Selling in China requires you to prepare a long-term expansion plan. It requires much patience as you build relationships and navigate the sometimes-ambiguous process and bureaucracy with customers, partners and government officials.